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Square secures credit in 'low hundreds of millions'

Square, a credit card reader, is arranged on an Apple iPhone.
Jin Lee | Bloomberg | Getty Images
Square, a credit card reader, is arranged on an Apple iPhone.

Mobile payments company Square has secured a new revolving credit facility as the burgeoning startup seeks more permanent capital to grow.

Goldman Sachs led the deal, which was inked over the weekend, and Morgan Stanley, JPMorgan Chase, Barclays and Silicon Valley Bank also participated, according to people familiar with the situation.

Through the credit facility, the company—which turns five this year— is said to receive access to approximately $200 million in additional capital, those familiar with the deal said.

A spokesperson for Square said, "Securing access to low-cost capital always makes financial sense, even for a well-capitalized company like Square."

Wall Street has taken great interest in Square since its founding in 2009, even as it challenges the traditional payments technology at old-line banks.

Citi Ventures and JPMorgan's Digital Growth Fund have invested in Square previously. David Viniar, the former CFO of Goldman Sachs, joined Square's board in October. Sarah Friar, Square's CFO,also spent about a decade at Goldman Sachs.

Square's valuation has been rising steadily as both Wall Street and Silicon Valley have begun trying to size up the risk it poses to the payments sector. Recent investments have valued Square around $5 billion, and banking executives have openly suggested a more involved partnership with Square—similar to the deal struck with Visa decades ago—would be advantageous or even possible.

Co-founder and CEO Jack Dorsey had been meeting with banks about a potential public offering for Square after the positive market reception of Dorsey's other brainchild, Twitter, started trading in November.

It is unclear when Square will pursue an IPO, but securing debt financing has been viewed as a precursor to that move after companies like Facebook, Twitter, Spotify and most recently, Dropbox, had taken similar actions.


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